Pimco's chief investment officer confirmed the firm is reducing its underweight position on long-duration US Treasuries after 30-year yields exceeded 5%, a level the firm views as offering more attractive risk-adjusted entry points. Pimco manages over $1.7 trillion in assets, making any duration shift meaningful for Treasury market flows. The move suggests that at current yield levels, large institutional buyers are beginning to re-engage with the long end despite ongoing fiscal supply concerns.
For Armada's traditional repo desk, Pimco represents a significant potential asset manager counterparty. A shift toward accumulating long-dated Treasuries increases the volume of eligible collateral that could be deployed in repo transactions. Additionally, if other asset managers follow Pimco's lead, broader demand at the long end could tighten repo spreads on 10-30 year Treasury collateral, affecting haircut and rate pricing on those positions.